Hampton accepts cigarette money, assets

HAMPTON — The city now formally owns more than $700,000 in cash, nine vehicles and a cache of electronics and office equipment from a wayward undercover cigarette operation shuttered by police in early 2012.

City Council members agreed, 5-0, to accept the cash and assets Wednesday evening.

"We now have the clear right and ability to appropriate the funds and accept the assets into our inventory," City Manager Mary Bunting said.

Bunting said she will vet staff proposals from the Police Division and other departments on how to use the assets to prevent youth violence.

Hampton received a letter from the bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) on Sept. 25 stating the federal agency that provided the initial money and cigarettes for the Blue Water Tobacco cigarette sting had no interest in keeping the cash or assets, City Attorney Cynthia Hudson.

The city was waiting for directions from the ATF and had kept the money in a bank account and the nine vehicles parked at Fort Monroe.

By accepting the assets, the city now owns a wide range of electronics, including cameras, cell phones, laptop and desktop computers, printers, iPads, cell phones and televisions. Among the many physical assets is furniture, a wine refrigerator and a barbecue grill.

The assets will be either used for the city's Safe and Clean Initiative, to "support city operations" or disposed of as Bunting deems appropriate, according to the resolution approved Wednesday evening.

The Blue Water Tobacco cigarette sting was designed to crack down on illegal cigarette traffickers while it was operating from June 2010 until January 2012.

Throughout that period, police purchased equipment, electronics and traveled throughout the country for the operation, although officers did not make a single arrest. More than $4 million flowed through the company's account during the 19-month operation.

The operation initially began as a joint venture with the ATF, with the agency providing an undisclosed amount of money and cigarettes for the operation. The cigarettes were purchased from Phillip Morris at a reduced rate. The ATF backed out a few months later after one of its agents was caught selling cigarettes on the side, but Hampton continued the operation on its own.

Former Hampton Police Chief Charles R. Jordan stopped after receiving a complaint about officer spending; he put three officers on paid leave a month later. One officer retired weeks later, another returned to active duty in July 2012, and a third, a police major, returned to work on Jan. 1, 2013.

Jordan was put on paid administrative leave in October 2012 as part of an internal investigation, and resigned a month later. Two of the officers originally put on leave have filed suits against Jordan and others alleging defamation.

The city has since hired an independent auditor to account for funds generated and spent throughout the operation. In February, Cherry, Bekaert & Holland, LLP, determined that the tobacco firm's financial controls were "very lax," and reviewers could not perform a thorough audit because of all the missing paperwork.